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tv   [untitled]    December 1, 2014 1:00am-1:31am PST

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and going up for the board approval so again, the major items the replacement of tim could and the revised billboard the mid cap vail and growth fund it was still an opposite to get those funds and review and update the implementation. >> sorry someone cell phone is here it's an apple i wanted to public comment that a member contracted me and deferred a second most important benefit that a lot retirees rely on especially early residencies an member contacted me and indicated a
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representative from capital was trying to get the capitalizes from our defendant's next in order account to a best estimate professionalism criminal e credential plan when that individual indicated concerns about the performance those are the kinds of things that are disturbing because that impacts the ban planning and if that's some kind of ongoing practice known or unknown it could impact the fund and there's only one that came forward but that greatly disturbs me because basically trying to undermine your compensation so i thought i'd bring that up to have someone a lot into that thank you. >> first of all, thank you for your presentation i appreciate
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it i wanted to know if you can expand on the watch list how long has been on the watch list. >> what the reasons for - >> well (inaudible). >> but they were not triggered for performance reasons it was - yes, that's in the record for the general fund. >> i want to address the events would it be better if i brought that up for the next item. >> so summarize the turnover and the liquidation in the fund. >> you mention about 2 hundred and - >> $73 million. >> okay it's - thank you.
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>> commissioner. driscal manager is he aware the situation that ms. lance sky raised. >> i'll follow-up on it. >> you'll follow-up on it? thank you >> you and i can talk off-line and we notified the board but as an interim since julia has left i've appointed karen by deputy director to cover the policy side we've asked maria newport to help out and cover the customer service center of the coming so if you have issues please refer them to maria or directly to karen or me.
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>> she's not. >> she's not. >> i think you've met her once when we did the strategy plan presentation i'll make sure she comes i want her to meet the board sure. >> anything else? mr. chair >> could you please call item number 8. >> good afternoon, commissioners karen deferred compensation manager i was going to do summarize the reasons for the replacement of the pimp could total fund but commissioner bridges did it much better the only thank or thing i'll add during the committee
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meeting there was a discussion of whether it might be pursuant to liquidate the assets before the november 12th meeting and after the meeting given certain news we had learned we were concerned that there would be additional liquidations that could impact the painter because we're talking about 10 percent of the fund so a decision particularly after we learned foreclosed liquidating the holdings to move over two back and forth effective november 3rd and fourth that was completed happy to answer questions and obviously angela is here to assist. >> okay opening it up for public comment for 8 seeing
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none, close public comment and open up for comments from the commission. >> yeah. i have a couple i want to talk about the liquidation you mentioned foreclosed was liquidating assets i was a member of the fund as well the question those are bonds the most go liquid assets can you weaver in the fact of our apprehension virtually a fund that is cash those are government bonds they can convert the manager can convert them into carbon right now. >> with with respect to the pimp could we have other pimp could holdings we're not talking about we were concerned with the large quantities of like
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dedication like 23.5 in october and in addition to ford fund swabbing had removed the fund from the target date funds we really didn't think that was in the participants interests to hold it when we had an additional to move into quickly and save the participants money. >> yeah. when we talked about that really didn't seem like an upside remaining if the fund given the concerns and our right they are liquid and we didn't have the concerns we'd be the last investor now detain from $300 million from its peak and
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those subsequential you out flows for the ousting and teachers there's been a lot of high profile redemption the foreclosed redeems was scheduled to hoop the same day and taken place in looking at the best interests the planter not moving expeditiously what was the best. >> those are liquid securities what's the problem because they're going to get notifications of allowed shuns they can facilitate the cash this is not equity you can't have a run on the accounts can i address that in terms of 6 if you see lick idiot issues what's
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the symptoms of the detain see of liquid shuns. >> it's true those are liquid they're not exclusive government bones it is not just you know very at this time securities most of it it they have lots of cash really what the concern comes down to say just to mitigate any reflexes from waiting tloo there could be - >> i'm asking the lid it issues was the prices if he should. >> they performed in october. >> maybe this will help you had some city government matters at hand in there if you want to say awe nekdz next day from the program $25 billion a month with that kind of entities with the
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price of security change. >> or stay stoed. >> it's hard to know what will be affected they've under performed their benchmark. >> so it's that performance base changed 20 base point is it due to the performance or the $25 billion. >> that's hard to answer that. >> we don't know. >> the market can't tell us that. >> we can't answer that. >> okay. >> on that side you'll see a distinction. >> i can say when you have the major public funds you have choices and if you have an option to opt out why not arrest
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secondly, why wait and take the risk when everyone is you're the last person out you know the liquor shuns are coming so tells us open that side and your question about performances because the fund is $170 billion and going down. >> just - >> unless you. >> i want to ask go ahead is it related to this. >> go ahead. >> i wanted obviously the issue for major staff departures is a big deal the question he want to ask the depth of the bench if you will, and typically those companies have deep ventures so for example, some of the have
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you talked to some of the other managers for example. >> yeah. >> march or the other managers of this fund have you talked to those people to get a better idea and the way they handle the effects of the exodus for the pimp could and it's important as well. >> no, we know the bench is a firmer the people are the people in the business what's unique about the pimp could fund it was murdering and bill great he's the credit guy and this good managers others portfolios not the trigger puller he's a seat those are the 3 replacement we think that creates concerns we don't know how those 3 individuals together or
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individually we don't have a track record in the interest of looking at the best thing for participant we thought we'll see how the track record goes and you you know we'll, of course, continue to follow this the most prudent thing to eliminate it. >> can you walk me through this in terms of you're asking for the revocation you talked about the team being part of the team i don't know about it until i read i assume many others are not aware so in terms of the team who what other people are aware of it and what other people you asked just walk me throw the process it's unusual i've been on the board for 22
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years? the first time we've seen before you were so walk me through this in terms of and it all evolved. >> the decision of pimp could. >> yeah. and why it happened on november 4th. >> angela and staff acted quickly and on friday we got into contract what staff and started a search process that is idle in the memo started 11 hundred strategies and came up with a recommendation worked with staff and had the materials prepared for the october 15th deferred coming committee meeting there was approval the plan was to take it to the board and discussion of whether it was net tatted moving to the board we waited for the board we kept
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seeing more and more liquidations we thought in the best interest. >> as far as process goes at the deferred coming meeting there was discussion that asked the question is it prudent to wait until the board meeting we had no recommendations to wait but circumstances changes the committee made it clear to support the action to protect the participants so with my authority of executive director when it was recommended to me we basically, i agreed to terminate and replace pimp could on november 3rd so that's the rest of the process. >> what i suggest and i'll conclude any comments in the future i would prefer if you would inform the board members of that rather than ask after
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the fact just going forward i don't want to read this on monday after a decision. >> can i have clarification are you suggesting you wanted the staff to ask for approval in advance or we're going to be doing that and notice in advance. >> i don't know if the board is authorized you need a special meeting i'm asking for a courtesy i didn't see. >> fair enough fair enough. >> we'll make sure that happens in the future. >> i spent a fair amount of time talking with pimp could people i'm going to asked favor i think that will be interesting to see the performance dan i've son has been played as the c i owe and other c i os
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reporting to him the story i got inside and outside dean's performance was outstanding and basically beating on the income fund there was a lot of issues for the kind of people that were in the 4-year-old and 6-year-old are area been there 20 years for the performance and not given an opportunity to move up there was a lot of contention going on in the firm maybe we've seen the performance maybe for us i'd like to refer that it is occurring for the last year but rather than having this happen now it would have been nice they had one of their fixed income people leaf and go to gm o the
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signs were in the working for quite a while so we probably should have been dealing with this earlier was one the comments made in the meeting we should have dealt with that a i don't know i thought that was a comment i made then and that's exactly back and forth and back and forth and . >> it was mohammed. >> this was a big signal when mohammed left and bill growth and most people didn't look across so if you guarantee go back two years ago then it should have been pulled. >> now again, interestingly when you talk to a lot of people
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inside of pimp could mohammed had not been running the funds he was supposed to be managing hands on and all those things are a favor we like as the board try to get early so i know on the flip side we're making 24 move it's a great move to do this it is a safety move and people are saying i don't want to take a chance of the hours but it is very well, maybe that the team of pimp could maybe better so the fact they've got facts from gm o and lost the staff and payroll came back and i think other people would be great to keep on top of that and see if it's stabilized.
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>> stabilized right we don't know having dan i've so on is now going to be running the firm and people say. >> haven't done that before and so we have to watch and see whether this new you know not star method but having a team they villaraigosa had a long time should produce a relative i think it's a good move and definitely support it. >> commissioner driscal salesmen as pimp could has been going on for a couple of years. >> i remember when airbnb left and came back and left quickly again, that's one of the signals okay there are other changes another our last board meeting i asked
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that the issue of deferred coming because the said pimp could runs the management team they are different and mr. gross was key that change should we wait and have another board meeting no november that's the reason we dedicated to staff to act and they acted and the committee supported that versus waiting that was on october 15th and here with we are on november 12th now i've been through other management changes, too, and when we he's we lose and we lose more than half the time we husbands. >> i support this move i think it's important to watch management we've been talking an allocation strategy and to wait for some of us on the board is
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usual for me it's not that it is liquid investment skerl we have investments it's about the fact there's been a sell off and potential 16th of marketing when there's a big sell off because management changes it means everything else is walking around without a stock to write this down you know waiting to see how things shakeout isn't necessarily the smallest thing especially commissioner bridges mentioned has better performances and fees you looked at a one or 5 or 10 number i support this. >> i support ratification of the replacement of it i have i
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guess two questions. >> telling me what happens from october 15th when the committee met and the 3rd of november that triggered execution when we know for a year there are on the lock list and we know there's a sell off on a monthly basis of $25 billion and knowing that at that time the meeting took place that the sell off continued. >> what triggered. >> again, it would come back to the daily headlines the ford 40 k they didn't say the dollar amount but one hundred and 15 percent of assets probably north of billion dollars so like san francisco and ford and other
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deferred coming plans there's a government or governance process so the first i can't remember who mentioned it the 15 plus billion dollars come out of the fund in october and november there's a whole slew of thousand gifted plans just ford was a big one i mentioned like six or seven other big plans knowing there is a rush of other plans that are following the governance process we decided it was best to move ahead and no upside waiting another 8 days and it bend the participants that's all to the good. >> second issue we accountants have a new company on board correct. >> yes. >> how long will this company pay under the emergency hire. >> we will not consider the
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back and forth as an emergency hire we went through a deep analysis on 3 activity managers and we looked the van guard funds we don't view this as a hire h it is conservative option that stills is like to like in the sense of replacing pimp could we defined as having opportuneic it is similar but more conservative and significantly lower fees. >> mr. chair, i was torn i have to tell you locally they've been around for a long personally, i was when you know the two firms
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and i'm sure commissioners know it's a tough decisions because they're great performance and the structure is great and if we had more funds and assets i'll probably say give them part of that they're well replaced in the industry. >> the chair will entertain a motion to rectify the pimp could. >> so moved. >> second a discussion. >> seeing none, 96 passes unanimously >> i was going to say i appreciate this interaction. >> good call item 9 please. >> commissioners this recommendation is simply to
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rectify an unintended consequence of what is going gadsby yard currently has a stable eventual fund its managed income fund is one hundred self-wrapped and we know the stabled value currently works we have an outside more than one organization that provides the wrap so what is happening the parents are paying the wrap twice we're going to be removing the income fund from the wrap guidelines to it the planters will only be paying one. >> it's a confusing topic i'll audio the reason the fund had to be double wrapped was 0 the
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market has rebounded so the market for the overlay stable fell to 96.590 in august of 2012 and we were looking at the gifted wraps the wraps provider were not comfortable having that managed income section of that not one hundred percent wrapped now the ratio has improved 98.6 as of september we can safe the fee schedule will drop 2.2 basis point a 5 percent drop and that's the driving force the the recommendations. >> thank you. i'll open up for public comment on item 9 close public comment commissioners. >> mike.
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>> i'm not sure everybody knows what with wrap is. >> this is question period and can you define wrap. >> can i define that. >> sure it's in the event that the book that the market value rate follows the book value paid out for withdrawals that fell there was a deficit that insurance contract essentially would be what would kick in. >> what's the price for the insurance. >> about 25 to thirty basis point have you 4 currently prior to the acquisition a so one of the great things that gal yard we have wrap from 25 to - >> entertain a motion.
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>> a recommendation is there a second. >> second. >> commissioner now it is the mind if you know of comments. >> on the motion (laughter). >> you can also have an opportunity to keep it in sync so the past wraurltz are done at the unit value; is that correct. >> correct. >> seeing nothing he will all in favor, say i. that passes unanimously thank you very much call item 10 please. >> this is a recommendation (inaudible). >> commissioners at the deferred compensation committee there's been discussion on whether we should pair down the options for the participants


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